Jeremy Masters and Christos Kotsakis
Enterprise Compensation Management
with SAP
®1 Introduction ... 21
2 Compensation Management Overview ... 25
3 Baseline Configuration and Infotypes ... 43
4 Compensation Budgeting ... 103
5 Process Administration ... 143
6 Self-Service ... 169
7 Business Add-Ins (BAdIs) ... 201
8 Advanced Topics and Additional Enhancements ... 237
9 Authorization Management ... 253 10 Job Pricing ... 279 11 Integration Components ... 313 12 Global Considerations ... 329 13 Reporting ... 341 14 Lessons Learned ... 373 15 Resources ... 383 The Authors ... 395
Foreword ... 15 Preface ... 17 Acknowledgments ... 19 1 Introduction ... 21 1.1 Target Audience ... 22 1.2 Book Layout ... 22 1.3 Product Releases ... 24 1.4 Summary ... 24
2 Compensation Management Overview ... 25
2.1 Compensation Planning Overview ... 26
2.2 Salary Benchmarking ... 28
2.2.1 Determining Which Jobs to Evaluate ... 29
2.2.2 Update and Extract Job Data ... 29
2.2.3 Selecting Providers for Survey Participation and Analysis ... 30
2.2.4 Updating Salary Structures and Developing the Budget ... 30
2.3 Budgeting ... 31
2.4 Compensation Planning ... 32
2.4.1 Eligibility ... 33
2.4.2 Guidelines ... 34
2.4.3 Proration ... 35
2.4.4 Planning and Review ... 36
2.5 Calibration ... 37
2.5.1 Realizing Calibration Objectives ... 39
2.5.2 Revising Proposed Recommendations ... 39
2.6 Payroll ... 39
2.7 Employee and Manager Review ... 40
2.8 Off-Cycle Increases ... 40
3 Baseline Configuration and Infotypes ... 43 3.1 Building Blocks ... 43 3.1.1 ECM Activation ... 44 3.1.2 Compensation Area ... 45 3.1.3 Compensation Plan ... 48 3.1.4 Compensation Review ... 49
3.1.5 Compensation Review Item ... 51
3.2 Eligibility ... 57 3.2.1 Compensation Program ... 58 3.2.2 Eligibility Variant ... 63 3.2.3 Eligibility Grouping ... 64 3.2.4 Appraisal Rule ... 67 3.2.5 Eligibility Rules ... 68 3.2.6 Eligibility Override ... 70 3.3 Guidelines ... 71 3.3.1 Guideline Variant ... 71 3.3.2 Guideline Grouping ... 72 3.3.3 Proration ... 74 3.3.4 Guideline Matrix ... 76 3.3.5 Guidelines ... 81
3.4 Compensation Plan Attributes ... 83
3.4.1 Plan Attributes ... 83
3.4.2 Plan Payroll Data ... 84
3.5 Long Term Incentives (LTIs) ... 88
3.5.1 Stock Unit ... 89
3.5.2 Vesting ... 90
3.5.3 Exercising ... 91
3.5.4 LTI Plan Attributes ... 92
3.5.5 Life Events ... 96 3.6 LTI Infotypes ... 98 3.7 Summary ... 101 4 Compensation Budgeting ... 103 4.1 Budgeting Overview ... 103 4.2 Life Cycle ... 105 4.2.1 Preparation ... 105
4.2.2 Initialization ... 114 4.2.3 Maintenance ... 128 4.2.4 Closure ... 131 4.3 Locking ... 132 4.4 Infotypes ... 134 4.4.1 Infotype 1000 (Object) ... 134 4.4.2 Infotype 1001 (Relationships) ... 134
4.4.3 Infotype 1500 (BS Element Management) ... 135
4.4.4 Infotype 1520 (Original Budget) ... 135
4.5 Configuration ... 136
4.5.1 Defining Reference Currency ... 137
4.5.2 Defining Budget Types ... 137
4.5.3 Define Budget Periods ... 138
4.5.4 Set Budget Control Parameters ... 140
4.6 Summary ... 141 5 Process Administration ... 143 5.1 Process Overview ... 143 5.2 Prepare ... 145 5.2.1 Eligibility Rules ... 146 5.2.2 Budgets ... 149 5.2.3 Salary Ranges ... 149 5.2.4 Guidelines ... 151
5.2.5 Compensation Worksheet Proofing ... 153
5.2.6 Prerequisites for Multilevel Approvals ... 154
5.3 Plan and Review ... 156
5.4 Calibrate ... 157
5.5 Activate and Communicate ... 159
5.6 LTI-Specific Processes ... 163
5.6.1 Process Life Events ... 164
5.6.2 Handling Stock Splits ... 166
5.7 Summary ... 168
6 Self-Service ... 169
6.1 Delivered Compensation iViews ... 170
6.1.1 Compensation Planning ... 171
6.1.3 Compensation Review iView
in Enhancement Package 4 ... 182
6.1.4 Salary Development ... 185
6.1.5 Salary Data ... 187
6.1.6 Long Terms Incentives ... 189
6.1.7 Compensation Eligibility ... 190
6.1.8 Compensation Guidelines ... 192
6.1.9 Compensation Adjustments ... 193
6.1.10 Salary Survey Data ... 194
6.1.11 TCS ... 197
6.2 Summary ... 199
7 Business Add-Ins (BAdIs) ... 201
7.1 BAdI Overview ... 202
7.2 BAdI Group: Compensation Planning and Administration ... 206
7.2.1 HRECM00_GUIDELINE (Determine Guidelines) ... 207
7.2.2 HRECM00_GDEGP (Determines Guideline Grouping) ... 208
7.2.3 HRECM00_MATRIX_SEGM (Method for Matrix Dimensions) ... 209
7.2.4 HRECM00_CARGP (Default Compensation Area) ... 211
7.2.5 HRECM00_CP1GP (Default First Program Grouping) ... 212
7.2.6 HRECM00_CP2GP (Default Second Program Grouping) ... 213
7.2.7 HRECM00_ELIGIBILITY (Determine Micro–eligibility) ... 213
7.2.8 HRECM00_ ELIGP (Determine Eligibility Grouping) ... 214
7.2.9 HRECM00_CALCBASE (Determine Calculation Base) ... 215
7.2.10 HRECM00_EFFDATE (Determine Effective Date) ... 216
7.2.11 HRECM00_SALARY (Determine Salary, Compa-Ratio, and Percent in Range) ... 217
7.2.12 HRECM00_ACTIVATION (Enhance Activation Routine) ... 219
7.2.13 HRECM00_CONSISTENCY (Provides Additional Online Validation) ... 220
7.2.14 HRECM00_EE_CURRENCY (Determine Employee Currency) ... 221
7.2.15 HRECM00_BDG0001 (Initialize Budget Values) ... 222
7.3 BAdI Group: LTIs ... 223
7.3.1 HRECM00_GRANT_INFO (Extract LTI Pan Grant Information for Outbound iDoc) ... 223
7.3.2 HRECM00_EXERCISE (Accept Inbound Processing
for Exercise Confirmation iDoc) ... 224
7.3.3 HRECM00_STKUN (Determine Stock Unit for Review Item) ... 224
7.4 BAdI Group: Job Pricing ... 225
7.4.1 HRECM00_PARTICIPANT (Extract Participant Info for Outbound iDoc) ... 225
7.4.2 HRECM00_AGEDATA (Aging of Survey Market Data) ... 226
7.4.3 HRECM00_STATSTYPE (Get Value for a Statistical Pay Group of an Employee) ... 227
7.5 BAdI Group: Compensation Statements ... 227
7.5.1 HRECM00_CRS (Extract Compensation Data for Compensation Review Statement) ... 228
7.5.2 HRCMP00TCS0001 (Read TCS Data for SAP-Defined Subcategory (PAY)) ... 228
7.5.3 HRCMP00TCS0002 (Read TCS Data for Customer-Defined Subcategory (PAY)) ... 229
7.5.4 HRCMP00TCS0003 (Read TCS Data for SAP-Defined Subcategory (CMP)) ... 229
7.5.5 HRCMP00TCS0004 (Read TCS Data for Customer-Defined Subcategory (CMP)) ... 230
7.5.6 HRCMP00TCS0005 (Read Person’s TCS Data for Customer-Defined Category) ... 230
7.5.7 HRCMP00TCS0006 (Authorization Checks for TCS) ... 231
7.5.8 HRPDV00TCS0001 (Read Data for SAP Subcategory (PDV)) ... 231
7.5.9 HRPDV00TCS0002 (Read Data for Customer-Specific Subcategory (PD)) ... 232
7.5.10 HRBEN00PAY0013 (Read Data on Subcategory Defined by SAP (Benefits)) ... 233
7.5.11 HRBEN00TCS0001 (Read Data on Customer-Defined Subcategory (Benefits)) ... 233
7.6 BAdI Group: Other ... 234
7.7 Summary ... 235
8 Advanced Topics and Additional Enhancements ... 237
8.1 Hot Topics ... 238 8.1.1 Handling Growth and Organizational Promotions During
8.1.2 Higher-Level Manager Planning ... 240
8.1.3 Workflow Approvals ... 242
8.1.4 Initialization and Reallocation of Budget Funds ... 243
8.1.5 Lack of Migration Path Available from Old to New Compensation Functionality ... 244
8.1.6 Clean Master Data ... 245
8.1.7 Handling Off-Cycle Increases ... 246
8.2 Additional Enhancements ... 246
8.2.1 Budget Reallocation Program ... 247
8.2.2 Budget Analyzer ... 247
8.2.3 Enhanced Compensation Planning User Interface ... 248
8.2.4 Compensation Scorecards ... 249
8.2.5 Compensation Statements ... 250
8.2.6 Compensation Proxy Manager ... 251
8.3 Summary ... 252
9 Authorization Management ... 253
9.1 Important Authorizations Used within ECM ... 254
9.1.1 P_PERNR ... 254 9.1.2 PLOG ... 257 9.1.3 P_ORGIN/P_ORGINCON ... 259 9.1.4 P_HAP_DOC ... 261 9.1.5 S_SERVICE ... 263 9.1.6 S_RFC ... 265
9.1.7 Summary of Main Authorization Objects Used in ECM ... 267
9.1.8 Activation Switches in T77S0 ... 268
9.2 Standard Roles in ECM ... 269
9.3 Using Structural Authorizations with ECM ... 271
9.3.1 Overview ... 271
9.3.2 Function Module RH_GET_MANAGER_ASSIGNMENT .... 272
9.3.3 Context-Sensitive Authorizations ... 273 9.4 Data Privacy ... 275 9.5 Summary ... 277 10 Job Pricing ... 279 10.1 Getting Started ... 280 10.1.1 Pay Categories ... 280
10.1.2 Compensation Job Groupings ... 283 10.2 Market Analysis ... 285 10.2.1 Vendor Setup ... 286 10.2.2 Data Import ... 289 10.2.3 Job Matching ... 298 10.2.4 Aging ... 299
10.2.5 Job Composite Creation (By Individual Job) ... 301
10.2.6 Job Composite Creation (En Masse) ... 304
10.2.7 Salary Structure Adjustment ... 307
10.3 Salary Survey Participation ... 310
10.4 Application Support ... 311
10.5 Summary ... 312
11 Integration Components ... 313
11.1 Overview ... 313
11.2 Module Integration ... 315
11.2.1 Integration with Personnel Administration (PA) ... 315
11.2.2 Integration with Organizational Management (OM) ... 316
11.2.3 Integration with Performance Management (PM) ... 318
11.2.4 Integration with Payroll (PY) ... 319
11.2.5 Integration with Personnel Cost Planning (PCP) and Simulation ... 322
11.2.6 Integration with SAP ERP Financials ... 323
11.3 Platform Integration ... 323 11.3.1 ESS and MSS ... 324 11.3.2 SAP NetWeaver BW ... 325 11.4 Vendor Integration ... 325 11.4.1 Payroll ... 326 11.4.2 Salary Surveys ... 326
11.4.3 Banks and Brokerages ... 326
11.5 Summary ... 327
12 Global Considerations ... 329
12.1 Project Team ... 329
12.1.1 Regional and Country Representation ... 330
12.1.2 Regional Leadership ... 330
12.2 Global Challenges ... 331
12.2.1 Global Employment ... 331
12.2.2 Currency and Exchange Rate ... 332
12.2.3 Language ... 334
12.2.4 Budgeting ... 337
12.2.5 Proration ... 337
12.2.6 Mandated and General Increases ... 338
12.2.7 Data Privacy ... 338 12.3 Summary ... 339 13 Reporting ... 341 13.1 ABAP Reports ... 342 13.2 Ad Hoc Query ... 359 13.3 Business Warehouse (BW) ... 366 13.4 Summary ... 370 14 Lessons Learned ... 373 14.1 Summary ... 382 15 Resources ... 383
15.1 Solution Documentation on SAP Service Marketplace ... 383
15.2 SAP Online Help ... 385
15.3 SAP Notes on SAP Service Marketplace ... 386
15.4 SAP Developer Network (SDN) — SAP Community ... 390
15.5 HR Expert ... 391
15.6 Annual Conferences ... 393
15.7 User Communities ... 393
15.8 LinkedIn ... 393
15.9 Internet Search Engines ... 394
15.10 Summary ... 394
The Authors ... 397
tion matters is certainly easier said than done however, but by implement-ing the budgetimplement-ing functionality available within SAP ERP HCM ECM you can achieve higher compliance. This chapter provides an overview of the budgeting functionality and how to use it. We will also explore some of the more popular budgeting topics including enhancements and Best Practices.
Compensation Budgeting
4
The topic of budgeting within ECM is one of the most important because compli-ance to a set budget is often mandated from a company’s board or compensation committee. Adherence to budgets becomes a critical piece of financial viability for many companies, especially in harder economic times. This chapter provides a comprehensive review of the standard compensation budgeting functionality available in ECM. After providing an overview of the functionality, we will dive deep into the budgeting life cycle — the key steps from inception to closure — that are experienced when administering compensation management budgeting within the system. We will also explore some of the available enhancements for the functionality, and some Best Practices you can benefit from.
Let’s start with an overview of what budgeting is and how it’s used within ECM.
Budgeting Overview
4.1
Compensation budgeting functionality starts with a firm understanding of the organizational hierarchy in the Organizational Management (OM) component of SAP ERP HCM. This is because SAP manages compensation budgets based on bud-get units that form a hierarchy that directly mimics the organizational structure. The budget unit (object type BU) is an organizational management object that is created during the budgeting process. It is associated to an organizational unit via
a standard OM relationship. The budget hierarchy itself (i.e., the roll-up of budget units) is formed based on the organizational structure. After creation, there is a one-to-one correlation between a budget unit and an organizational unit. Like organizational units, budget units report up to other budget units. This forms a hierarchy called the budget structure, which is why the official name for the budget unit object is actually budget structure element.
As with many concepts within OM, the concept of inheritance plays a key role in the functionality. Budget units contain and fund subordinate (lower-level) budget units. This way, budgets can be accounted for both from an individual and roll-up perspective. This makes reporting against these budget units more robust because a snapshot of a budget can be retrieved for the manager’s own organizational unit and for that same manager’s entire span of control (i.e., the manager’s own orga-nizational unit and all subordinate orgaorga-nizational units).
Budgets can be used to track both monetary funds and nonmonetary pools. Mon-etary budgets hold value and are currency dependent (e.g., dollars, Euros, etc.). Merit budgets, for example, would be considered a monetary budget because they are based on value (e.g., increases to base pay). A non–monetary budget, however, contains units and not value. Examples include restricted stock and stock options. Non–monetary budgets need to specify the relevant stock unit (i.e., stock ticker) applicable to the funding. However, only one stock type can be used within the budgets funding (i.e., you cannot mix options and shares together in one pool). Each budget is tied to at least one compensation plan. Although two plans (such as a merit plan and lump-sum payment plan) can be tied to the same budget, typi-cally there is a one-to-one mapping between a plan and a budget. The link is done at the compensation review item level on its attributes within the configuration. Linking budgets to compensation review items is explained in detail in Chapter 5, Process Administration.
The budgeting process itself can be represented in a sequential fashion, and can be implemented and managed in a systematized and methodical manner if the order of execution is known and prepped for. So let’s discuss the budgeting life cycle and highlight the steps within the process in detail.
Life Cycle
4.2
The budgeting life cycle follows a four-step process from inception until closure. Managing your compensation budgeting process using the procedures specified within the life cycle will help arm your implementation team and compensation department with the knowledge needed to effectively complete the process. The four-step process includes the following steps:
Preparation E E Initialization E E Maintenance E E Closure E E
Figure 4.1 shows the budgeting life cycle within SAP ERP HCM ECM.
Preparation Initialization Maintenance Closure
Enterprise Compensation Management: Budgeting Life Cycle
Budgeting Life Cycle within SAP ERP HCM ECM
Figure 4.1
Let’s discuss each step in this process beginning with the preparation step.
Preparation 4.2.1
Budget preparation involves the creation of the initial budget structure based on the organizational hierarchy. Before preparing the budget, an up-to-date organiza-tional structure is critical. There are two ways to create the initial budget structure. In both ways, the budget structure is created without any funding. In other words, during the preparation step, only the budget structure is created but no budget is funded for any budget units. This comes in the next step of the process.
Note
It is a good idea to involve your Human Resources (HR) department in the timing of your budget structure creation. Before creating your budget structure, an attempt should be made at ensuring the organizational structure is as current as possible. This especially includes major reorganizations that could affect the creation of new organizational units or the reassignment of existing organizational units. Processing these updates before budget creation time provides a more accurate budget structure once planning starts. Careful consideration should be made to include any major restructuring during the planning process. We will cover the topic of on-cycle employee movement later in this chapter.
To create a “shell” budget structure, navigate to Transaction PECM_GENERATE_ BUDGET from the Easy Access page via the path: Human Resources • Personnel Management • Compensation management • Enterprise Compensation Man-agement • Budgeting • Generate Budget from Organizational Hierarchy. The use of Transaction PECM_GENERATE_BUDGET is a one-time event during the preparation step. Figure 4.2 shows the selection screen of the transaction with selec-tion criteria Budget Type and Budget Period in the selecselec-tion labelled Budget Selec-tion. In this area, you provide both the budget type and budget period you want to create your budget structure against. Example values for Budget Types include Salary Increase, Bonus budget, and Long-term Incentive (LTI) budget. Example val-ues for Budget periods include 2009, 2010, 2011, etc. The meanings behind budget type and budget period are described in detail in Section 4.5, Confi guration.
Selection Screen for
The next section of the selection screen, Organizational Structure, requires specify-ing a top-node organizational unit. This is the organizational unit that represents the very top node for your budget, so it’s important to select the correct one. For many companies, this organizational unit will be your root organizational unit (e.g., the top-most organizational unit in your organizational structure). The fi eld, Number of Levels, determines how many levels of the organizational structure are referenced during the creation of the budget structure. The number entered in this fi eld corresponds to the depth levels within a structure. In other words, a 1 represents the highest level, and all subsequent numbers represent lower levels. If you want to process the entire structure, just leave this fi eld blank. Blank is also the default and is most typically used.
The last section on the selection screen contains a confi gurable dropdown called Stock Unit-Only for LTI Budget. This fi eld contains a listing of stock units repre-senting the elements associated to your company’s non-monetary budgets. Again, this fi eld is only required for LTI budgets because the stock unit is a dependency for all LTI budgets.
Note that there is no test run fl ag for this program. Once executed, the program creates the budget structure (see Figure 4.3).
Confi rmation Message About a Successful Budget Structure Creation
Figure 4.3
To view the newly created budget structure, go to Transaction PECM_DISPLAY_ BUDGETS or navigate the following path from the Easy Access page: Human Resources • Personnel Management • Compensation management • Enterprise Compensation Management • Budgeting • Display Budget.
On the selection screen of the Display Budget report (see Figure 4.4), select the relevant budget type and budget period. From the dropdown, select either the budget unit or organizational unit of the budget structure you want to display. If
the Financing checkbox is checked, the accompanying organizational unit (for each budget unit) is displayed in the output. This is only for informational purposes because all organizational unit–level budget data is maintained and tracked to its associated budget unit.
Selection Screen for the Display Budget Report
Figure 4.4
In addition, a standard layout option is available if you want to make any user-specifi c or system-wide defaults available.
The output of the program is shown in Figure 4.5. The budget structure is shown as a hierarchy. The following information is shown as a default from left to right in the hierarchy:
Budget Unit
E
E — long description of the BU object
Object ID
E
E — ID of the BU object
Total Budget
E
E — total amount of funds available for allocation (from a roll-up perspective)
Total Spent
E
E — total of funds spent (from a roll-up perspective)
Total Rest
E
E — total remaining budget (from a roll-up perspective, i.e., Total Bud-get minus Total Spent BudBud-get)
Distributable Budget
E
E — total amount of funds available for allocation (from an
Spent Budget
E
E — total of funds spent (from an individual organizational unit perspective)
Own Rest
E
E — total individual remaining budget (from an individual organiza-tional unit perspective, i.e., Distributable Budget minus Spent Budget)
Output of the Program
Figure 4.5
The transaction is organized in two sections of three. The fi rst section represents the budget view from a roll-up perspective (columns: Total Budget, Total Spent Budget, and Total Rest) whereas the second section represents the budget view from an individual organizational unit perspective (columns: Distributable Budget, Spent Budget, and Own Rest). The two views in total give you a holistic picture of how the organization is fairing once in the planning process. Obviously, after the preparation step, the budget structure is “hollow” (i.e., without any funding). We will return to this transaction later in the process to show the robustness of the information displayed.
Note
The new compensation functionality (application component PA-EM, ECM) actually uses the same budgeting functionality as the older compensation functionality (application component PA-CM, Compensation Management). This means that the previous transactions, programs, and user exits used to create or fund the budget structure can still be leveraged in the new ECM functionality. However, full regression testing should occur on any pre-existing programming targeted for use in the new functionality.
Transactions still available include:
HRCMP0015 — Change Budget (Administration) HRCMP0014 — Display Budget (Administration) HRCMP0011 — Create Budget Structure HRCMP0012 — Display Budget Structure HRCMP0013 — Change Budget Structure
There is another way to create and view your initial budget hierarchy. As of ver-sion Enterprise 4.7, Web-based Transaction PECM_START_BDG_BSP is available as an alternative for managing budgets. Despite being initiated from the SAP GUI, the transaction launches a web page using Business Server Pages (BSP) technology. This transaction, shown in Figure 4.6, gives you an alternate way of creating the budget within the Budget Maintenance link. (We’ll discuss the other links as we work through those steps.)
Output of Standard Budget Audit Report (with Budget Structure Not Funded Yet)
Figure 4.6
Create Budget Screen with Budget Type, Budget Period, Organizational Unit, and
Figure 4.7
Depth Available
After selecting the Budget Maintenance link, click on the Create button. In this screen, select your Budget Type and Budget Period from the relevant dropdown selections (see Figure 4.7). In the Org Unit ID fi eld, enter or search for the root
organizational unit that you want to use as your top-node budget. For searching, click the Binoculars icon and select the appropriate organizational unit from the pop-up. Depth operates the same way as the functionality on the GUI version.
Note
Before using the budgeting BSP pages, you must work with your Basis team to acti-vate all BSP applications starting with prefi x hrecm_bdg_*. To do this, go to Transaction SICF (HTTP Service Hierarchy Maintenance). On the selection screen of the transaction, select Hierarchy Type “SERVICE.” Activate the following BSP applications under path Default_Host • SAP • BC • BSP • SAP: hrecm_bdg_start (Overview), hrecm_bdg_srv02 (Budget Structure services), hrecm_bdg_srv (Budgeting Services), hrecm_bdg_ra_vl (Re-assign Budget Value), hrecm_bdg_maint (Budget Maintenance), and hrecm_bdg_chkrl (Check and Release Budget).
Once you have selected (at least) Budg. Type, Budget Period, and Org Unit ID, click the Save button. This creates your budget hierarchy . Click Save again to save the budget. Figure 4.8 shows a newly created budget using this functionality. Like Transaction PECM_GENERATE_BUDGET, a new budget hierarchy is created with no funded budget units.
Newly Created Budget Structure Using Web-based Transaction PECM_START_BDG_
Figure 4.8
You should note that all budgets are fi rst created in status 1 (Planned). After creat-ing these budgets durcreat-ing this preparation process, you may determine that a struc-ture was either created in error or will no longer be used. In these cases, you can delete the budget hierarchy and all associated relationships via a standard program. To delete a budget in planned status, go to Transaction RE_RHRHDL00 or navigate the following path from the Easy Access page: Human Resources • Organiza-tional Management • Tools • Database • Delete DB records.
Warning
If you have been granted access to use this transaction in your production environment, be extremely careful using it.
Selection Screen Parameters for Test Run of Program to Delete Budget Unit Hierarchy
Figure 4.9
You should always ensure the program is run in test mode fi rst (the default has the Test fl ag checked) to verify the deletions from the database. In the selection screen (see Figure 4.9), specify the Plan Version as 01, Object Type as BU, Object ID (the
top-node budget unit of the structure that you want to delete), and evaluation path BU-BU (PMG: Budget hierarchy — budget). You should leave the infotype and sub-type fi elds blank, which tells the program to delete all relevant relationships for all objects selected in the evaluation path.
After running the program, a table of objects and relationships are listed with Plan Version, Object Type, Object ID, Infotype, Subtype, Planning Status, Start Date, End Date, and Object Abbreviation. Figure 4.10 shows this output. When per-formed in test mode, a message indicating Test Run Without DB Change confi rms that no updates were made to the database. When the actual run is performed, no message appears.
Output for Test Run of Program to Delete Budget Unit Hierarchy
Figure 4.10
Warning
All program runs should first be performed in test mode before running for updates. It is also important to know what objects are being deleted, because inadvertently deleting other OM objects or relationships could be devastating and could require a system restore from a backup.
To review, step 1 of the process creates the “shell” of the budget hierarchy. After preparation, the budget structure is created but is still not funded. The funding of the budget occurs within the next step of the life cycle — initialization. So let’s discuss the initialization step now.
Initialization 4.2.2
Budget initialization involves the funding, checking, and releasing of the bud-get structure. After the preparation step, the budbud-get hierarchy is created but not funded. In this step, you fund and release the budget after performing a consis-tency check. A consisconsis-tency check is used to ensure that all funds roll up properly and all data (objects, relationships between those objects, and infotypes) maintain integrity. It functions much like other consistency checks within the SAP system by indicating success messages (in green), warning messages (in yellow) and error messages (in red).
The actual budget structure can be funded either manually or automatically. How you fund your budget is one of the most important decisions you will make, if you’re incorporating the standard budgeting functionality into your implementa-tion. Regardless of the level of automation chosen, the funding of the budget struc-ture populates Infotype 1520 (Original Budget) for each BU. Infotype 1520 holds both the individual and roll-up values — whether they are a value (e.g., dollars) or units (e.g., stock options). The values within Infotype 1520 cannot be maintained through a standard transaction.
If you decide to fund the budget manually, a few transactions can be used. Web-based Transaction PECM_START_BDG_BSP can be launched and used to initially fund the budget manually. After searching for and selecting your budget struc-ture using one of the given selection options (e.g., budget unit name, organiza-tional unit ID, etc.), the “total budget” amounts for each budget unit can be input. This way, you can manually establish your budget using either a “top-down” or “bottom-up” approach. In Figure 4.11, Budget Unit 50002183 (Sales, EMEA) is manually updated with US $35,000.00. This is the total amount that is allocated to
employees within that budget structure. This amount then rolls up to Budget Unit 50002176 (Global Sales), which holds a total budget amount of US $840,000.00 — of which only US $160,000.00 has been distributed to its subordinate budget units: 50002182 (Sales, Americas), 50002183 (Sales, EMEA), and 50002184 (Sales, Asia Pacifi c / Australia). The Distributable column tells you how many funds are available to distribute to lower (child) organizations. The delta between Total Bud-get and Distributable is the amount allocated to employees within that budBud-get unit itself.
Manually Entering Budgets via Web Interface (Transaction PECM_START_BDG_BSP)
Figure 4.11
If you have a large organizational structure with complex budget calculations, this could be a diffi cult (if not impossible) feat to pull off. Most customers who manu-ally fund their budget structure fi rst calculate the budget numbers outside of the tool (using Excel or another familiar application) and then simply enter values in a top-down or bottom-up approach.
During a manual update, you can also apply mass percentage changes to one budget unit or a budget structure. Using this functionality, you can apply a percentage (either
negative or positive) for one organizational unit (with the possibility to update supe-rior budgets) or apply a “mass percentage change” that updates the entire node you are on and all of the subordinates (that budget unit and all budget units below). Another important option that is available while applying a percentage change is whether or not you want to update the superior budget values. By selecting the Update Superior Budget Values checkbox, the percentage change (whether applied individually or en masse) will roll up to the highest level of the budget structure. If left unchecked, the higher level budgets will remain unaffected. Figure 4.12 shows the options available for Percentage Change.
Applying Percentage Changes within Planned Budget Structure
Figure 4.12
Figure 4.13 shows 3% applied to Budget Unit 50002185 (Human Resources, United States) with both the Mass Percentage Change checkbox and the Update Superior Budget Values checkbox selected. This means a 3% budget increase is applied to the Total Budget values for the selected budget unit and all budget units below.
The increases also roll up to the highest level budget — Budget Unit 50002175 (ABC Global Corporation).
Three Percent Applied to Planned Budget Structure
Figure 4.13
Another available option is the Roll-up Value functionality. Using this functional-ity allows you to perform bottom-up budgeting. If you want to load budget val-ues for individual budget units without considering superior budgets (bottom-up budgeting), it is possible to subsequently roll up budget values with this option. The Roll-up option automatically performs a roll-up of budget values such that both the roll-up and individual budget amounts are corrected. Let’s say that bud-get unit C rolled up to budbud-get unit B, and budbud-get unit B rolled up to budbud-get unit A. In the tool, we then gave all budget units US $1,000 for the total budget. If the Roll-up option was selected, then budget unit C would have US $1,000 as roll-up and individual amounts, budget unit B would have US $2,000 roll-roll-up and US $1,000 individual amounts, and budget unit A would have US $3,000 roll-up and US $1,000 individual amounts.
As you can see, there are several options for assisting in a manual creation of the budget. The Mass Percentage and Roll-up Value functionality provide robust capa-bilities for speeding up an otherwise lengthy process. Despite these shortcuts, manual budget creation may still not be a viable alternative for your organization. If this is the case, you need to fund the budget automatically.
For most customers, automatic funding is the most popular method of budget allocation because it is more efficient and reduces the amount of errors caused by manual intervention. There are several ways to automate the funding of the bud-get structure. You can fund a budbud-get unit hierarchy by using one of the methods listed in Table 4.1, which lists each option with a description and the technology used to implement it.
Funding Option Description Technology Used
Funding via values from the Personnel Cost Planning (PCP) component
Budget funded by importing a Personnel Cost Plan. Assumes budget values have already been created within the PCP component.
Standard Transaction PECM_INIT_BUDGET or through the Import PCP data button in the Web-based Transaction PECM_ START_BDG_BSP. Funding via SAP Business
Add-In (BAdI) HRECM00_ BDG0001
A BAdI (HRECM00_ BDG0001) is provided from SAP that allows you to update the funding of the budget units.
Web-based Transaction PECM_START_BDG_BSP via the Custom import button calls the active implementation of BAdI HRECM00_BDG0001. Funding via a custom
program
A custom program can be written to fund a budget hierarchy.
Custom program (either purchased or built).
Automated Funding Options for Budgets
Table 4.1
With the first option, budgets can be created from personnel cost plans within the PCP component. The PCP component is used to calculate staff costs using cost items (e.g., salary wages, fringe benefits, and incentives) to create personnel cost plans. In Figure 4.14, an example of this type of cost plan has been created for the 2010 Merit Budget for the ABC Global Corporation.
By using PCP functionality, bottom-up budgeting can be performed. All budgets can be funded based on an employee-level calculation and can even incorporate guidelines based on current or previous performance management ratings. Within the PCP component, you would need to perform the necessary configuration to support the calculations, including cost items, cost plans, and planning scenar-ios. The calculations could incorporate a fixed percentage (e.g., 3% for all eligible employees) or guideline percentages based off the employee’s own appraisal
rat-ings. Using the latter approach would necessitate knowing that all (or at least most) of the appraisals for the eligible population are calibrated and completed.
Example of a Personnel Cost Plan Established for the 2010 Merit Budget
Figure 4.14
Note
For more information on confi guration steps for PCP, please refer to the SAP Help site at http://help.sap.com/saphelp_erp60_sp/helpdata/en/e9/53c73c13b0ce5be10000000
a114084/frameset.htm.
Specifi c help on the confi guration of PCP for ECM budgeting can be found at: http://
help.sap.com/saphelp_erp60_sp/helpdata/en/ef/56094043618f5ce10000000a155106 /frameset.htm.
After a successful personnel cost plan run, the cost plan is ready for import into the compensation budget. The budget must always be in planned status during this import. Once released, the import utility can no longer be used. Figure 4.15 shows Transaction PECM_INIT_BUDGET and the pop-up dialog used to select the per-sonnel cost plan. On the selection screen, the budget data must be selected under the Budget Attributes and Budget Unit sections. Budget Determination should be HCP1 (PCP). Clicking on the Parameters button displays a pop-up dialog. Here, specify 01 (Current Plan) as the plan version and the appropriate personnel cost plan created within PCP. If only some of the cost items should be included in (or excluded from) the budget, you can do this by using the cost item fi lter.
PCP Import Program for Compensation Budgeting
Figure 4.15
In addition to using Transaction PECM_INIT_BUDGET , PCP data can be imported using Web-based Transaction PECM_START_BDG_BSP . Within the Budget Main-tenance section of the application, the Import PCP Data button can be used to import PCP plan data. Figure 4.16 shows the Web version. Fields Budget Deter-mination, Personnel Cost Plan, and Cost Item(s) are available for use. Cost Item is optional, but if desired, more than one cost item can be specifi ed to fi lter the import. Clicking on the Enter More Cost Items button allows you to enter addi-tional cost items.
Both transactions serve the exact same purpose and achieve the same end state — the difference is more a matter of service delivery. If you are using the web
inter-face for other budget matters (e.g., budget creation, budget reassignment, etc.), you may decide to use Web-based Transaction PECM_START_BDG_BSP. Other-wise, SAP GUI Transaction PECM_INIT_BUDGET is probably more practical.
Importing PCP Data from Web Transaction PECM_START_BDG_BSP
Figure 4.16
There are two drawbacks to using the PCP approach for budget initiation. The fi rst is that another PCP component must be confi gured (and tested) to leverage the functionality. Most SAP customers do not use PCP functionality within SAP ERP HCM, and those who do not would most likely also not implement the function-ality to solely support the compensation budgeting process in ECM. The second drawback is that once the budget is released (and spent), it cannot be refreshed using this functionality. This is less of an issue if you plan on using a freeze date or period, but it makes the planning process unmanageable if you are trying to keep the budget allocation current based on employee movement.
Now let’s take a look at a second approach for automating budget funds — using BAdI HRECM00_BDG0001 (Compensation Budgeting: User exit). This BAdI has one method — called DETERMINE_BUDGET_VALUES — which allows updates to the budget values stored within Infotype 1520. Figure 4.17 shows the method and interface of the BAdI.
Method DETERMINE_BUDGET_VALUES for BAdI HRECM00_BDG0001
Figure 4.17
Within the Budget Maintenance section of the Web-based Transaction PECM_ START_BDG_BSP , a Custom import button is available. Clicking on this button allows a budget (in planned status) to be recalculated based on the logic imple-mented within the active implementation of BAdI HRECM00_BDG0001 . In addi-tion, a custom program could call this BAdI implementation to apply specifi c logic to the budget funding.
The third approach is to use a custom program to fund budgets. As described earlier, this program may utilize BAdI HRECM00_BDG0001 . However, logic can be written to update the budget structure based on your specifi c requirements — regardless of budget status (planned or released). That last point is extremely important because the standard functionality (via Web-based Transaction PECM_ START_BDG_BSP ) cannot automate mass refreshes.
Budget reassignment functionality is discussed in the next section, but another big win for using this approach is that you can use the same custom program to refresh the budgets (after budget release) as you do when initializing. Figure 4.18 shows an example of a Budget Allocation Program. In the selection screen, you are
allowed to select a Budget Type, Compensation Review Item, Budget Period, Bud-get Unit, and Key Date to allocate the budBud-get. In this design, the budBud-get hierarchy with top Budget Unit (50000723) will be refreshed on Key Date 01/31/2007 based on the Budget Type, Compensation Review Item, and Budget Period.
Custom Budget Allocation Program
Figure 4.18
The program can apply a fi xed percentage (e.g., 3%) or can incorporate more com-plex logic. For example, in Figure 4.19, a custom table is shown that allows the storage of a percentage based on Personnel Area. In this scenario, employees in PA DE01 are budgeted at 10% while employees in PA US01 are budgeted at 5%. This is a simple scenario but more sophisticated logic can be implemented based on requirements and design considerations.
Custom Table to Support Custom Budget Allocation Program
Figure 4.19
You have now seen the differences between manually or automatically updating the budget hierarchy structure for its initialization. After initially funding the
bud-get hierarchy, it’s important that the budbud-gets are checked for consistency before being released. Budgets must be programmatically changed from status 1 (Planned) to status 2 (Released) to be planned against in a productive environment. Figure 4.20 shows the Check and Release Budget section within Web-based Transaction PECM_START_BDG_BSP . While still in planned status, consistency can be checked by selecting the Check Values button. The message Budget Values are Consistent is displayed in the upper left corner of the screen when the budget has no issues. The budget check does a check to ensure budgets roll up consistency (i.e., superior budgets fund lower level budget units) and to review budget unit to organizational unit relationships to validate proper linkages.
Check Budget for Consistency Using Web-based Transaction PECM_START_BDG_BSP
Figure 4.20
This same functionality is available from the SAP system via Transaction PECM_ CHK_BUDGET (Check and Release Budget). Figure 4.21 shows Transaction PECM_ CHK_BUDGET. On the selection screen, a Budget Type, Budget Period, and Budget Unit ID are specifi ed. A Check Values radio button under the Processing Options section of the screen indicates that the consistency check should be performed.
Selection Screen for Transaction PECM_CHK_BUDGET
Figure 4.21
After running Transaction PECM_CHK_BUDGET for consistency, an output screen is rendered with any issues listed. If the budget values are consistent, the mes-sage Budget Values are Consistent is prefi xed with the Budget Unit ID (see Figure 4.22).
Successful Messages on Output for Budget Consistency Check
Figure 4.22
After a successful consistency check, the budget must be released . Like most of the budget functionality within ECM, the budget can be released in two ways — online or in the SAP GUI. If performed online, web-based Transaction PECM_ START_BDG_BSP can be accessed for releasing the budget. Within the Check and Release Budget section, the Release Budget button is available (see Figure 4.23). To release the budget, you need to select the root object (top-level) budget. In other words, the budget hierarchy can only be released at its highest level.
Release Budget before Save
Figure 4.23
After release, you will see the message Budget is Successfully Released; Save Your Changes. Be aware that the budget units will not be saved in released status until you actually select the Save button on the upper left section of the screen. Figure 4.24 shows a budget structure in released status. (Notice the Budget Status fi eld on the top of the screen has been changed to Released).
The other option for budget release is via the standard SAP GUI Transaction PECM_CHK_BUDGET . On the selection screen, a Budget Type, Budget Period, and Budget Unit ID are specifi ed (it is the same program as the consistency check). A Release Budget radio button under the Processing Options section of the screen indicates that the budget should be released. In Figure 4.25 you can see the out-put after budget release Message Text Budget 50002175 Status is Successfully Set to Released.
Saved Budget in Released Status
Figure 4.24
Budget Successfully Set from Planned to Released
Figure 4.25
Once a budget is released, you can only go back to the planning status if none of the budget has been spent. There are two ways to do this:
The Reset to Planning Button on the Budget Details section of Check and E
E
Released from Web-based Transaction PECM_START_BDG_BSP
Transaction PECM_CHK_BUDGET can be used to select Reset to Planning (see E
E
Budget Successfully Set to Planned by Reset to Planning Functionality.
Figure 4.26
Once the budgets have been checked and released, you can begin compensation planning. This is usually the fi nal step before giving access to the portal to your planning managers and HR professionals/specialists.
So, let’s look at how to maintain the budget structure once you’re in a production environment. The next step in the process — maintenance — enables the HR or
Compensation department to update budget data even after release.
Maintenance 4.2.3
As of Enterprise 4.7, budgets can be maintained even after the budget has been released via the web-based Transaction PECM_START_BDG_BSP. The budget real-location functionality is found in the Budget Reassignment section of the start page. Budgets can be manually reallocated using this functionality regardless of planned and released status.
The Budget Reassignment section within web-based Transaction PECM_START_ BDG_BSP houses this functionality, which is composed of four steps:
Choose Sending Org. Unit E
E
Choose Receiving Org. Unit E E Enter Values E E Review Results E E
In Figure 4.27, Organizational Unit 50000073 (Facilities) has been selected as the sending (losing) organizational unit. It is from this organizational unit (i.e., Budget Unit) that budget values are transferred.
Step 1 of Manually Reassigning Budget Values: Selecting Sending Org. Unit
Figure 4.27
In step 2, the receiving organizational unit is selected. Figure 4.28 shows Orga-nizational Unit 50000074 (HR Business Partner) selected as the receiving organi-zational unit. It is from within this Organiorgani-zational Unit (i.e., Budget Unit) that budget values are transferred.
Step 2 of Manually Reassigning Budget Values: Selecting the Receiving Org. Unit
In step 3, the budget and spend values are specifi ed (see Figure 4.29). The new val-ues for Total Budget and Spent Budget are identifi ed. After input, select the Reas-sign button. When you see the message Budget Has Been Successfully Transferred; Review and Save, this indicates that you can proceed in the process.
Step 3 of Manually Reassigning Budget Values: Enter Values
Figure 4.29
During the last step of the process, a review is done before any funds are trans-ferred. For both the sending and receiving organizational units, the following information is displayed for fi nal review (see Figure 4.30):
Sending Org. Unit — Original Total Budget E
E
Sending Org. Unit — New Total Budget E
E
Sending Org. Unit — Original Spent Budget E
E
Sending Org. Unit — New Spent Budget E
E
Receiving Org. Unit — Original Total Budget E
E
Receiving Org. Unit — New Total Budget E
E
Receiving Org. Unit — Original Spent Budget E
E
Receiving Org. Unit — New Spent Budget E
E
In addition, the new budget hierarchy is displayed with the new values within the structure. You can traverse through the structure to see how the proposed transfer affects the existing hierarchy, and to save the transfer of budget funds, you need to select the Save button.
Step 4 of Manually Reassigning Budget Values
Figure 4.30
Although this manual process allows you to reallocate budget funds from one budget unit (or organizational unit) to another, it is not always suffi cient due to the volume of employee changes that occur during planning time. For instance, employee movements (such as promotion and transfers) and employee termina-tions may account for hundreds (even thousands) of transactermina-tions.
You can, however, achieve a more automated means of keeping current with changing budget data using a custom program similar to the one describe during our initialization discussion. In fact, one program can be created to both initial-ize and continuously refresh the budgets units. This is the most popular means of refreshing the budget automatically.
Note
In versions of SAP before Enterprise 4.7, budgets could not be updated once in released status. The concept of manual or dynamic budget reassignment is regarded as one of the most critical pieces of the solution.
After the planning period ends, it is time for budget closure. Budget closure is the
last step in the process.
Closure 4.2.4
Budget closure is the informal process that involves the fi nal reconciliation between budgeted and spent funds from a roll-up perspective. Although there is no status
for archiving the budget, the status is kept as “Released.” Reports, such as PECM_ DISPLAY_BUDGETS, can be run and given to management teams to validate adher-ence to the budget.
The four steps covered — Preparation, Initialization, Maintenance, and Closure — provide the storyboard for the budgeting process with ECM. Understanding the available options within each of these steps is important to your own implemen-tation and maintenance.
Locking
4.3
Unfortunately, budget locking problems are quite common and can cause a lot of user frustration. Budget locking was actually built to maintain data integrity. When a user accesses the planning sheet on the SAP portal, the budget units associated with the employees being planned on become locked. A budget lock is intention-ally placed on all BUs that are being processed to ensure that no other manager (or HR Professional) can decrease budget funds from those same budget units. This is a very good thing because it retains the integrity of the budget data being planned against.
However, when a manager does not exit out of the iView properly, the lock on a budget may not release. When that same manager tries to plan again (or if a higher-level manager attempts to plan) for employees in the affected budget units, a hard error message appears. Figure 4.31, for example, shows the error message Budget 50000773 is locked for user JMARTIN and Budget 50000774 is locked for user JMARTIN. The error message is repeated for all affected employees on the screen, which means that a line item appears on the portal worksheet for each case.
To manually release locks, you use Transaction SM12 (Select Lock Entries). Figure 4.32 shows the selection screen. You can easily determine budget unit locks for a particular user by providing the SAP username (e.g., JMARTIN) of the user and clicking on the List button.
Budget Locking Error on Portal Compensation Worksheet
Figure 4.31
Selection Screen for Transaction SM12
Figure 4.32
Figure 4.33 shows the output of Transaction SM12 . The lock entry list provides important information on the lock such as user name, time, mode, table, and lock argument. The lock argument specifi es the exact budget unit being locked along with other technical information.
Output of Transaction SM12
Figure 4.33
Note
SAP recognizes this behavior in SAP Note 896994 (Compensation budget locking in Java-based iViews). However, no technical solution is offered. Rather, SAP advises that users of the application be trained to always click the Exit button rather than navigating to another area of the portal or another website.
Let’s now discuss the infotypes integral to the budgeting process.
Infotypes
4.4
There are several infotypes that facilitate the budgeting functionality in SAP, so let’s look at each in detail.
Infotype 1000 (Object) 4.4.1
Infotype 1000 (Object) holds the budget unit’s short and long texts. The short and long texts are taken directly from the short and long texts of the organizational unit upon initial budget structure creation. You can change these manually via web-based Transaction PECM_START_BDG_BSP if you want.
Infotype 1001 (Relationships) 4.4.2
Infotype 1001 contains all of the relationships. In Table 4.2, the objects and rela-tionships used within the budgeting process are listed.
Object Object Type Text Relationship Specification Relationship Relationship name Related Object Type Related Object Type Text BU Budget structure element
A 003 Belongs to BU Budget
struc-ture element
BU Budget
structure element
B 003 Incorporates BU Budget
struc-ture element BU Budget structure element B 300 Finances... O Organizational unit O Organiza-tional unit A 300 Is financed by... BU Budget struc-ture element
Budget-related OM Objects and their Relationships to Other Objects
Table 4.2
Relationship 003 is used to connect the budget structure with the organizational unit structure from an organizational structure hierarchy perspective, and relation-ship 300 is used to link a budget unit to an organizational unit from a financial (budget) perspective.
Infotype 1500 (BS Element Management
4.4.3 )
Infotype 1500 provides important data on the budget unit such as budget type, status (planned versus released), whether the budget is allocable, and the financial year.
Infotype 1520 (Original Budget) 4.4.4
Infotype 1520 is where both the total roll-up and individual budget amount is stored.
Now let’s discuss the configuration of the budgeting functionality. This configura-tion is required if you are budgeting within ECM.
Configuration
4.5
The confi guration tasks supporting the budgeting functionality within ECM are relatively straightforward. All budgeting confi gurations are performed within the Implementation Guide (IMG) under the path: Personnel Management • Enter-prise Compensation Management • Budgeting. The following components com-pose the confi guration:
Defi ne Reference Currency for Budgeting E
E
Defi ne Budget Types E
E
Defi ne Budget Periods E
E
Set Budget Control Parameters E
E
A link to display all implementations of BAdI HRECM00_BDG0001 is available under the path: Personnel Management • Enterprise Compensation Manage-ment • Budgeting • Business Add-In: Initialize Budget Values.
In Figure 4.34, you can see the IMG activities to set up budgeting.
Budgeting Node within the IMG
Figure 4.34
Defining Reference Currency 4.5.1
A reference currency is a key step within the process because all budgets must have one. And because all budgets must roll up to one and only one currency, a default (or reference) currency must be defi ned within the confi guration. All other cur-rencies are converted into the reference currency using the standard SAP currency conversion table (TCURR), which holds all of the exchange rates. Standard ECM uses exchange rate type M, which is defi ned within the system as the “standard translation at average rate.”
The reference currency is confi gured within the IMG via the path: Personnel Management • Enterprise Compensation Management • Budgeting • Defi ne Reference Currency for Budgeting. You can also access the reference currency directly from Transaction SM30 from Table view V_T7PM2_B.
In Figure 4.35 you can see that for Budget Type Group 02 (Compensation Manage-ment), USD (United States Dollar) has been defi ned as the reference currency.
Reference Budget Currency within the IMG
Figure 4.35
Next, let’s discuss the confi guration of budget types.
Defining Budget Types 4.5.2
Budget types are set up to record the various budget “buckets” or “pools” within your organization. Budget types do not need to be created each year unless new compensation plans have been defi ned. For example, if some year in the future, you implement a new LTI plan, you will need to create a new budget type, assum-ing you have not been managassum-ing an LTI process in ECM previously.
Budget types are confi gured within the IMG via the path: Personnel Manage-ment • Enterprise Compensation Management • Budgeting • Defi ne Budget Types. You can also access budget types directly from Transaction SM30 from Table view V_T7PM3_B. You can see this confi guration table in Figure 4.36.
Budget Types Confi guration within the IMG
Figure 4.36
Budget type is a four alphanumeric fi eld and its name has a 20 character limit. Each budget type has two checkboxes. The fi rst checkbox, Mon. Budget, is the indicator for monetary budget. If this checkbox is selected, it indicates to the system that the budget units associated with this budget type are managed in currency units. A budget for merit increases, for example, would be based on currency and the budget type would be selected as monetary. Most stock plans would not have this value selected because they are unit based, not currency based.
The last checkbox is an Allocat. fl ag. Budgets can only be allocated in the system when this fl ag is selected because it is equivalent to an active fl ag. Only when this fl ag is activated can budgets be distributed and operational. You could use this functionality if, for example, you retire a compensation plan within your system and want to be ensure that no future budgets use that particular budget type. Now that we understand budget types, let’s discuss what budget periods are and how they are used.
Define Budget Periods 4.5.3
A budget period defi nes the time frame in which you administer your budget. The timeline (start and end date) should include the effective date of the
compensa-tion element (i.e., Infotype 0759 record). For example, if the effective date of your merit adjustment is 04/01/2009, then your budget period should contain this date within its range. Examples of budget periods include 04/02/2008 - 04/01/2009, 01/01/2008 - 04/02/2009, and even 04/01/2009 - 04/01/2009 in this scenario. The key date is the day on which the currency conversion takes place during the budget creation process (if any conversion is needed). If left blank, the system uses the system date as its conversion date when creating the budget unit.
To confi gure your budget periods within the IMG you follow the path: Personnel Management • Enterprise Compensation Management • Budgeting • Defi ne Budget Periods. You can also access budget periods directly from Transaction SM30 from Table view V_T7PM9_B. Figure 4.37 shows this confi guration table view.
Budget Periods Confi guration within the IMG
Figure 4.37
After confi guring budget periods, control parameters can be set within the confi gu-ration. This is performed in the next IMG activity, which we will explain next.
Set Budget Control Parameters 4.5.4
By setting certain control parameters within the confi guration, you can infl uence the behavior of some important budgeting functionality. The fi rst control param-eter dparam-etermines if the reassignment of a budget is permitted after (at least) some of it has already been spent (i.e., allocated) on an employee. The second is related to the budget allocation of the planning manager. Based on this fl ag, the system either funds the manager’s own organizational unit or the organizational unit above the organizational unit where the manager sits.
You can set budget control parameters within the IMG under the path: Personnel Management • Enterprise Compensation Management • Budgeting • Set Bud-get Control Parameters. You can also access these control parameters directly from Transaction OOECM_BD.
Figure 4.38 shows the two control parameters. If this view looks familiar, it’s because both values are stored in Table T77S0 .
Budgeting Control Parameters Confi guration within the IMG
Figure 4.38
This transaction simply isolates these two compensation budget-relevant values. In Table 4.3, each value is described in detail with comments.
This concludes the confi guration review of budgeting functionality within ECM. As you can see, several important constructs including budget types, budget
peri-ods, and other specifics — such as reference currency and control parameters — need to be configured to utilize the budget functionality within ECM.
Group Semantic Abbreviation Value Abbreviation (default) Description Comments
HRECM BDGRA X Reassignment
allowed after budget has been spent
X = you can reassign this budget, even if part of it has already been spent. If blank, the system checks if any part of this budget has already been spent. If so, you cannot reassign this budget.
PCOMP MGBUD Budget for
line manager
If X, the budget of the next highest organizational unit (for which a budget is available) is used. In other words, the line manager of an organizational unit is paid from a different budget than the other employees in the organizational unit.
Budget-related OM Objects and Their Relationships to Other Objects
Table 4.3
Summary
4.6
As you learned in this chapter, compensation budgets constitute a critical piece of the process. Frequently, Key Performance Indicators (KPIs) and metrics are reported out against how well a functional area, division, subsidiary — and even-tually — company have done in keeping to budget. Managing the life cycle — from preparation, initialization, maintenance, and closure — will enable a smooth pro-cess from start to finish.
In the next chapter, we will discuss the compensation planning and approval pro-cess, and one of the key activities within ECM — activation.
A
Accruals, 325 Activation, 321 Activation switches, 270 Ad hoc query, 362 Transaction, 363 Adjustments, 41Adobe interactive forms, 241 Advanced Business Application Programming (ABAP), 203 Aging, 301
Aging survey data, 30
Application area PA-EC-JP, 313 Application link enabling, 335 Appraisal rule, 67 Approval process, 37, 382 ASUG, 395 Authorization management, 255 Authorization objects B_NOTIF, 270 I_QMEL, 270 P_ABAP, 270 P_ASRCONT, 270 P_HAP_DOC, 263, 269 PLOG, 256, 258, 259, 260, 263, 269 P_ORGIN, 256, 261, 263, 269 P_ORGINCON, 261, 262, 269, 276 P_PCLX, 270 P_PCR, 270 P_PERNR, 256, 258, 263, 269 P_TCODE, 266 S_BDS_DS, 270 S_RFC, 255, 267, 269 S_SERVICE, 255, 265, 266, 269 S_TCODE, 266 S_USER_GRP, 270 Authorization profile Z_MANAGER, 276 Authorizations
For Enteprise Compensation Management, 261
B
BAdIs, 203 HRBEN00PAY0013, 235 HRBEN00TCS0001, 235 HRCMP00COMPA_RATIO, 236, 355 HRCMP00_PS_RECL, 236 HRCMP00SAL0001, 236 HRCMP00TCS0001, 230 HRCMP00TCS0002, 231 HRCMP00TCS0003, 231 HRCMP00TCS0004, 232 HRCMP00TCS0005, 232 HRCMP00TCS0006, 233 HRECM00_ACTIVATION, 221, 222, 323 HRECM00_AGEDATA, 228, 302 HRECM00_BDG0001, 118, 121, 136, 224 HRECM00_CALCBASE, 217, 218, 323 HRECM00_CARGP, 213 HRECM00_CONSISTENCY, 222 HRECM00_CP1GP, 214 HRECM00_CP2GP, 215 HRECM00_CRS, 230 HRECM00_EE_CURRENCY, 223, 335 HRECM00_EFFDATE, 218 HRECM00_ELIGIBILITY, 215 HRECM00_EXERCISE, 226 HRECM00_GDEGP, 210 HRECM00_GRANT_INFO, 225 HRECM00_GUIDELINE, 208, 209 HRECM00_MATR_APPR (Matrix Dimension Method Appraisal) , 320HRECM00_MATRIX_SEGM, 207, 211 HRECM00_MATRIX_SEGM (Methods for Matrix Dimensions). , 320 HRECM00_MATR_MBOAPPR (Matrix Dimension Method MBO Appraisal), 320 HRECM00_PARTICIPANT, 227 HRECM00_SALARY, 219, 236 HRECM00_STATSTYPE, 229, 285 HRECM00_STKUN, 226 HRHCP00_DC_EMPLOYEE, 325 HRPDV00TCS0001, 233 HRPDV00TCS0002, 234 SKIP_BADI, 210 BAdI area A Catalog, 225 BAdI group
Compensation Planning and Administration, 208 Compensation Statements, 229 Job Pricing, 227 Long-term Incentives, 225 BAdI groups, 208 Other, 236 BAdI HRECM00_BDG0001, 122 Banks, 328 Bargaining units, 277 BI content, 369 Budgeting, 371 Compensation administration, 369 Job pricing, 372
Long -term Incentives, 371
Bottom-up, 31 Brokerages, 328 BSP pages Activation of, 111 Budget Funding, 114 Budget analyzer, 249 Budget hierarchy, 104 Budgeting, 31, 103, 149, 245
Applying mass percentage changes,
115
Applying roll-up, 117
Automatic funding options, 118 Closure, 105, 131 Configuration, 136 Consistency check, 114, 124 Hierarchy, 111 Initialization, 105, 114 Life cycle, 103, 105 Maintenance, 105, 110 Overview, 103 Preparation, 105 Reassignment, 128 Reference currency, 339 Release, 125
Updating superior budget units, 116
Budgeting configuration Budget period, 138 Budget types, 137 Control parameters, 140 Reference currency, 137 Budgeting funding
Via custom program, 122
Budget locking, 132
Budget reallocation program, 249 Budgets, 27, 31, 104 Budget structure, 104 Deletion, 112 Budget type, 56 Budget units, 103 Business Add-Ins, 203 Business Intelligence, 343 Business Server Pages (BSP) , 287
C
Caching tips, 243 Calculation base, 55, 217 Calculation base wage, 84
Calibration, 27, 37, 157, 380, 381
Calibration data, 38 Central person, 333 Compa-ratio, 34, 35
Compensation adjustments iView, 195 Compensation approval iView, 181 Compensation area, 45
Compensation category, 48
Compensation component wage, 84 Compensation eligibility iView, 192 Compensation eligibility override, 376 Compensation guidelines iView, 193 Compensation job groupings, 285 Compensation job groups, 282 Compensation management, 318 Compensation plan, 48, 104 Compensation plan attributes, 83 Compensation planning, 26, 32, 36 Compensation planning iView, 171 Compensation planning worksheet, 48 Compensation plan payroll data, 84 Compensation program, 58
Compensation review, 49 Compensation review iView, 182 Compensation review statement, 229 Compensation scorecards, 251 Compensation statements, 27, 40, 252, 338, 378 Context-sensitive authorization, 275, 276 CSAL, 321, 322 Currency, 325, 334 Currency conversion, 55
D
Data categorization, 278 data import, 291 Data import Mapping table, 295 Data masking, 278 Data privacy, 277, 278, 341 Data protection directive, 341Delegate, 36 Demotions, 41 Downgrades, 41
E
ECM activation, 44 Effective date, 53 Eligibility, 32, 33, 54, 57, 146, 213, 375 Eligibility grouping, 64 Eligibility override, 70 Eligibility rules, 33, 34, 68 Eligibility variant, 63 Employee movement, 376Enhanced compensation planning user interface, 250 EP-PCT-MGR-HR, 391 ERP HCM (HR) forum, 393 European union, 341 Exchange rate, 335 Exchange rates, 325 Exercise window, 91 Expatriates, 333
F
Feature CARGP, 47, 213 CELGP, 216 CGDGP, 72 CP1GP, 59, 214 CP2GP, 61, 215First compensation program grouping, 58 Fixed pay, 26 Freeze periods, 50, 376 Function group, 268 Function module RH_GET_MANAGER_ASSIGNMENT, 274, 275
